Speaking after Chelsea's FA Cup final win over Everton, Ballack told BBC Sport: "I haven't signed yet but I have agreed for another year."

Ancelotti is the favourite to succeed Guus Hiddink, who stepped down after his side's Wembley victory.

Ballack, 32, added: "It's not done yet but it looks like he will be coach."

The former Reggiana, Parma and Juventus boss announced he was leaving the San Siro after they played their final Serie A game on Sunday.

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Chelsea need a replacement for Hiddink, who is returning to his job as Russia coach after capping a successive four-month stint with the Blues by winning at Wembley on Saturday.

They have been in talks with Ancelotti and Ballack feels the 49-year-old Italian would be the right man to take charge, adding: "I haven't worked under him and I don't know him very well but you can see from the work he has done at Milan that he is a successful manager."

Ballack, who is captain of Germany, joined Chelsea from Bayern Munich in May 2006 and would have been a free agent this summer.

He has won two FA Cups in his time with the Blues but bigger prizes have eluded him and he believes he has unfinished business in west London.

"You always want to win something you haven't won," added Ballack. "Next year, the focus like always will be on the Premier League and the Champions League."

Whether or not Ancelotti does take charge, Ballack will be playing under his fifth manager during his spell at Chelsea by the time next season gets under way.

He was signed by Jose Mourinho and Avram Grant, Luiz Felipe Scolari and now Hiddink have all come and gone since then.

In the meantime, Manchester United have won the League three times and Ballack believes it is obvious what his side have been lacking.

"What we need at Chelsea is consistency," he explained.

"There is not much that we need to change to win the Premier League next season. We have a great team, which is the most important thing, but we have to change the manager again and we will need a bit of time to adapt.

Ballack says Ancelotti is a successful coach

"It is not always like under it was under Guus where somebody comes in and the team starts winning straight away - that is not normal.

"Every coach works with different methods and the players have to get to know him - hopefully we won't need too much time because if we do we will be a little bit behind."

Despite the enforced upheaval, Ballack remains confident his side are capable of stopping United and insists he and his team-mates also have the hunger to regain the title they last won in 2006.

"Next year we want to win it again," said Ballack. "We know that United are a very very good team, and they have a good year behind them so it will not be easy.

"They have won it three years in a row which is a big thing, they can play with confidence and it looks like it is getting easier for them.

"But we have showed this season, especially in the Champions League, that we can play really good football too.

"I don't think we need to buy anybody because we already have a lot of good players on the bench.

"That is for the club to decide but, if you look at the performances over the last couple of years in reaching finals, we have a really good squad and are heading in the right direction."

Ballack dedicated his side's Wembley victory to Hiddink, who has transformed the club in his brief spell in charge, and says the Dutchman played a key role in their success in his final game.

"He was really relaxed," revealed Ballack. "He was enjoying the day and even when we were 1-0 down you could see he was really confident in us because he knows how we can play.

"Even when we were behind, nobody thought about defeat because he believed in us so much - it has been been a big pleasure to work with him."

Ballack's team-mate Ashley Cole was also pleased Hiddink, 62, was able to secure some silverware before leaving the club.

The England left-back, who was voted man-of-the-match for his performance in the final, said: "Everyone spoke about it before the game, we wanted to send him off with something, we thought he deserved it.

"We are going to miss him, today was about him and we are just happy he has signed off with a trophy.

"He did a great job, got respect from all the players, the staff and the fans and I think everyone was on his side, which helped."

The former Arsenal defender became only the fourth player to win the Cup on five occasions, and the first since 1891.

But the 28-year-old will not be satisfied unless Chelsea can challenge for the League and Champions League next season, adding: "Next year we have to do better than just winning the FA Cup.

"Guus will be a hard act to follow but I think, whoever comes in as manager next, we have to treat him exactly the same and show the passion that is here to win a bigger trophy next year."

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